UAE bond sales raise record $6 billion

(MENAFN - Khaleej Times) Etisalat dp world and emaar malls group to use funds for key business strategies

top uae entities have raised more than 6 billion in record bond sales.

telecom operator etisalat led thursday’s announcements by raising 4.3 billion in its debut bonds issue the biggest ever for a corporate issue in the region. this was followed by the world’s third-biggest ports operator dp world with 1 billion and emaar malls with 750 million through sukuk.

all three firms confirmed the sales on thursday.

etisalat

the bonds sold by abu dhabi-based etisalat were bid up in the secondary market on thursday with the us dollar tranches outperforming euro paper according to traders.

the telecom operator sold 4.3 billion bonds in four tranches on wednesday setting one record as the region’s biggest corporate issue ever and another for the cheapest pricing of any gulf bond above mid-swaps bankers said.

the two euro tranches attracted massive demand from european investors. about 80 per cent of the euro bonds — a seven-year 1.2 billion euro tranche and a 12-year tranche of the same size — went to european investors according to allocation data.

only 46 per cent of the dollar bonds — a five-year 500 million tranche and a 10-year tranche of the same size — went to europeans. thirty-one per cent was allocated to middle east investors.

“the issued bonds are denominated in us dollars and euros and consist of four tranches. a five-year tranche of 500 million with a coupon rate of 2.375 per cent per annum; a seven-year tranche of €1200 million with a coupon rate of 1.75 per cent per annum; a 10-year tranche of 500 million with a coupon rate of 3.5 per cent per annum; and a 12-year tranche of €1200 million with a coupon rate of 2.75 per cent per annum” etisalat said in its statement.

lead managers for the etisalat issue were deutsche bank goldman sachs hsbc and rbs.

“net proceeds from the issuance of the bond will be used for repayment of the outstanding facilities amounting to €3.15 billion that were used to fund the acquisition of vivendi’s 53 per cent stake in maroc telecom” the statement added.

the securities due in 2024 will pay an annual interest of 1.75 per cent and be converted at a price of 27.1396 a share a 37.5 per cent premium to its average share price of today the company said in a statement.

dp world chairman sultan ahmed bin sulayem said: “the proceeds from the convertible bond provide us with additional financial flexibility at an extremely low interest rate to take advantage of further organic or inorganic investment opportunities in order to enhance returns to shareholders over the medium term.”

dp world group chief executive officer mohammed sharaf said: “we are taking advantage of the current low-cost financing opportunities in the convertible market to secure long-term financing so we can continue to grow our business to meet the changing needs of our customers. the issuance also allows us to diversify our funding sources and access a broader investor base.”

emaar malls

emaar malls group raised 750 million from a debut sale of islamic bonds in line with a previously-announced bank loan and sukuk roadshows for the purpose of providing the appropriate capital structure for the group ahead of its proposed initial public offering.

emaar malls group successfully priced a 750 million 10-year regs debut sukuk with a profit rate of 4.564 per cent representing 182.5bps over 10-year mid-swaps on wednesday 11 june 2014.

the transaction came on the back of an expedited yet comprehensive global roadshow covering key financial centres — london singapore hong kong and the uae. the proposed issuance was very well received by the market with the order book closing at approximately 5.4 billion representing 7.2 times oversubscription.

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